Purchasing Process Overview
The purchasing process is used to procure goods or services from an outside supplier. It is governed by the Manual of Business Procedures, local, state, and federal laws and regulations. Purchases are initiated through a requisition in the Finance System, but the course it follows varies depending on cost, complexity, legalities, or unique characteristics of the buy. Early involvement of Purchasing is recommended.
Below are the steps of a typical Purchase Order
- Determine your need for goods, or services.
- Consider sustainability factors and purchasing from internal suppliers first— University Stores, Open Orders, and MSU Surplus Store.
- If the item is unavailable from internal sources and meets Pcard criteria, use a Pcard.
- If the goods or services are not available from internal sources or are inappropriate for Pcard use, use the Finance System to initiate a requisition for a Purchase Order.
- As a part of workflow routing, the Purchasing Department will receive your requisition and it will be assigned to a staff member as a Purchase Order. The order is not complete until it is in an approved status in the system. Departments are not to retrieve or provide the order number to a supplier while the order is in an unapproved status.
- The Purchasing staff is responsible for ensuring university policy and procedure, federal, state and local laws and regulations are met.
- The request will be reviewed to determine the best course of action based on cost, funding and MSU requirements. For complex or high-dollar buys, Purchasing staff will contact the end user to discuss the transaction. Please note that budgetary quotes can be obtained by departments, however competitive bids are to be solicited by Purchasing.
- As a part of the negotiation process, Purchasing will ensure that the best-value shipping option is chosen (from an MSU strategic contract) and included in the PO.
- The supplier ships the item to Central Receiving and sends the invoice to Accounts Payable.
- Logistics delivers the item; you verify the PO number and inspect the order to make sure it is complete, accurate, and in good condition.
- Accounts Payable processes the supplier payment based upon the designated payment terms. Payment requests are routed to the fiscal officer for approval. For any invoices that should not be paid, the fiscal officer should place them on hold. Once approved, the hold can be removed and the fiscal officer can approve the invoice through for payment.
- The Purchasing staff is available to assist following issuance of the order, receipt of the goods or services, or post-payment.